Better IP & Retail Sales Prints Encouraging, Property Headwinds Still Evident

China August activity data was better than expected in terms of IP growth and retail sales. IP printed at 4.5% y/y (3.9% forecast and 3.7% prior) This owed to a recovery in manufacturing activity to 5.4% y/y (from 3.9% in July). Mini also rebounded somewhat, which helped offset weakness in utilities. Auto manufacturing was +9.9% y/y, versus 6.2% in July.

• In the retail space, headline sales were +4.6% y/y (+3.0% forecast and 2.5% prior). Consumer goods spending rose 3.7% y/y (versus 1.0% prior). Restaurant spending was +12.4% y/y, but this cooled further from July's 15.8% pace. Automobiles and parts of consumer spending were firmer.
• Fixed asset investment printed slightly below expectations, 3.2% ytd y/y (3.3% forecast and 3.4% prior). Private sector enterprises were -0.7% ytd y/y, losing a little further momentum from July.
• Property investment was close to forecasts (-8.8% ytd y/y versus -8.9% projected). Property sales edged down to -1.5% ytd y/y from +0.7% prior. New property construction was -24.4% ytd y/y.
• Earlier data showed house prices falling by slightly more in August (-0.29%) compared with July.
• Still, given recent policy initiatives around easing home buying restrictions and lower mortgage rates, better sentiment may emerge in the space.
• Finally, the jobless rate edged down to 5.2% (versus 5.3% prior and 5.3% forecast).